The Top 5 Issues in LCFVs This Week: Is Our Low Carbon Future Sustainable?

Happy Thursday friends! Here’s my weekly take on the five most interesting developments in low carbon fuels and vehicles (LCFVs) trends over the last week:

Demand for rare earths is increasing, in no small part to the transition to electric vehicles and renewable energy ― the question is, will the supply be there? And, what kind of environmental tradeoffs might we be making to secure our low carbon future? A piece in China Dialogue explores these questions as it affects sustainability in China.

Now that the California Legislature has enacted new targets to reduce GHGs by 40% over 1990s levels by 2030, the focus is now on implementation ― and that is not going to be cheap or easy. It’s going to take an utter reshaping of the state’s economy to get there, but if they can do it successfully, the rest of the world is going to follow.

In a similar vein, an economist this week produced a paper showing roughly that it would cost the U.S. anywhere between $1.28-5.28 trillion to meet Paris Agreement targets and that we would need to replace coal and natural gas with wind and solar and electrify transportation.

Rapidly evolving battery technology producing extended range, more models from automakers and the proliferation of charging stations will foster the widespread adoption of electric vehicles faster than we all may think, according to a piece from the Wall Street Journal (WSJ). Yes, that WSJ ― the same one with much skepticism about anything Tesla.

EPA released its annual AirTrends Report 2016 this week. I was surprised to find that in looking at total emissions by source, mobile sources (non-road and highway vehicles) still represent 51% of total criteria pollutant emissions.

China accounts for 85% of rare earth output as of 2015, according to the U.S. Geological Survey. The author of this piece questions whether there will be enough supply to meet demand for the low carbon technologies (mainly wind and EVs) that will be needed to meet Paris Agreement targets and what the environmental consequences of getting to our low carbon future might be. Global demand for rare earths, according to UN figures, will be between 200,000 and 240,000 tons annually by 2020, with 70% of that demand coming from China. The author highlights the irony that the very substances that are supposed to deliver our low carbon future are fraught with environmental hazard.

Compounding the issue is the black market with tens of thousands of tons or rare earths illegally mined and traded every year. “Those higher up the supply chain turn a blind eye to this, and international cooperation on law enforcement is minimal. With no international traceability system, such as that for conflict minerals, companies have no way of monitoring supply chains and we cannot know if the electric cars we drive or the smartphones we use contain illegally mined and smuggled rare earths.” The mining (illegal and legal) have produced serious environmental issues, including contaminated land and water. The author notes:

“A visit to the mines and industrial parks of Ganzhou gives no sense of a glorious ‘kingdom’. It’s a scene of devastation: crude open air mines and smelters, and rough muddy attempts at restoring the landscape. It’s a sight hard to associate with the environmental technologies that rare earths are used in. Water in and around the mining area is severely polluted. According to China Environmental News, the water supply for 30,000 people in the county of Longnan alone has been affected by rare earth mining, with 40,000 mu (6,589 acres) of farmland seeing reduced yields or complete harvest failure.

Over a decade of excessive extraction has left the surface water in the Zudong mining area, China’s biggest source of ion-absorption rare earths, with ammonia and total nitrogen levels far above safe standards; while groundwater is nowhere near up to minimum drinking water standards. In April 2012 a cross-ministry investigation headed up by the Ministry of Industry and Information Technology found 302 abandoned rare earth mining sites in Ganzhou, with 97.34 square kilometres affected. It would take 70 years just to deal with the 190 million tonnes of mining waste left behind.”

Looking at rare earths throws up other unanswered questions about our low-carbon future. The author asks, “How will all that waste water be handled? Will there be new drinking water safety issues? Will the costs of better technology and management, intended to reduce emissions, be reflected in rare earth prices?” Good questions.

Now that the California legislature has approved an extension to the state’s climate change program with the requirement to slash emissions 40% below 1990 levels by 2030 (see last week’s post) the challenge is going to be figuring out how to get there. Read more about it here.

What’s it really going to take over the next 35 years to cut U.S. GHG emissions to 80% below 2005 levels? According to one economist who produced a paper on the question this week: US$1.28-5.28 trillion net. How would we do it? Simply put (but not simply accomplished!) we would need to:

Replace the coal and natural gas we currently use, representing 66% of energy output into half-solar and half-wind generation, and then price out the panels and turbines.

Assume that the U.S. will need to boost its transmission grid by 25%.

Subtract the cost savings from never having to buy fuel because of solar and wind.

Deduct what we’re expected to invest to upgrade the old energy infrastructure.

Electrifying transportation would cost about $620 billion in additional generation capacity. The author couldn’t come up with an estimate for storage to deal with the problem of intermittency, but noted to Bloomberg cost will be lower than the $350 a kilowatt-hour PowerWall battery introduced by Tesla last year. Some experts who reviewed the paper took issue with the numbers (some feel it is closer to $8 trillion), assumptions and analysis, but agree that we need to be talking about these issues and planning for the future. Moreover, all agree there are a number of variables for which we don’t have great answers right now, including:

Won’t electricity demand grow more slowly than gross domestic product because we’ll need less power as we get smarter about using it?

What about technologies other than battery storage? Toyota Motor Corp. is still making bets on storing power in hydrogen fuel cells as well as batteries.

Local opposition to the nationwide revamp of infrastructure could be massive.

The bottom line is that the low carbon energy future is going to cost us a lot and the shift will not be easy. But, you knew that already.

Rapidly evolving battery technology producing extended range, more models from automakers and the proliferation of charging stations will foster the widespread adoption of electric vehicles faster than we all may think. The article didn’t offer any sense of timing, but did note that a number of automakers will start to offer plug-in hybrid (PHEV) models around 2020-2025 (no doubt to comply with fuel economy standards) noting that BMW and VW plan to offer only PHEV models by then. PHEVs are expected to be a bridge to full EVs and will help drivers become comfortable with the technology and overcoming “range anxiety.” With many automakers offering multiple PHEV/EV models in their lineups, that will then lower vehicle prices, another factor driving the faster transition to EVs.

This week EPA released its annual AirTrends Report 2016, which is now available in an interactive format. So modern! So user friendly! Even…fun to use! A few of nuggets from the mobile source side of the equation:

Air quality has improved while vehicle miles traveled (VMT) has increased and the economy has grown.

Nevertheless I was surprised to find that in looking at total emissions by source, mobile sources (non-road and highway vehicles) represent 51% of total criteria pollutant emissions, shown in the figure below. Moreover, 59% of NOx emissions come from mobile sources; for CO, it’s 65%. PM (2.5 and 10) by contrast were about 20% and VOCs were about 28%. I’m surprised that the percentage is still so high after all the fuels, vehicle and engine programs implemented over the last 30+ years to reduce these emissions. The U.S. is among the countries with the cleanest fuels, vehicles and engines in the world (and getting still cleaner) and yet…here we are.